KP scam-tainted firms still fighting Sebi ban

More than five years after being named in the Ketan Parekh scam, most of the brokerage houses linked to the price rigging are still fighting the ban imposed on them by the Securities and Exchange Board of India (Sebi).

In the last couple of weeks, the Securities Appellate Tribunal (SAT) is taking up the appeals filed by the 'tainted' brokerage houses. While in some cases the brokerage houses may win an appeal, in other cases, the appeal of the same brokerage houses against the ban are dismissed.

At least 20 brokerage houses including Vidyut Investment, Classic Credit, N H Securities, Saimangal Investrade, Panther Fincap & Management Services, Triumph Securities, Luminant Investment, Nakshatra Software, Goldfish Computers and Ketan Parekh's associates "" Karthik K Parekh and K N Parekh Securities "" are challenging the ban at SAT.

The cases relate to price rigging in scrips such as DSQ Software, UTI Bank, Lupin Laboratories, HFCL and Global Trust Bank among others, in 1999-2000.

"The SAT has set aside the Sebi order against Classic Credit in one case, while in another price rigging case, it has dismissed the appeal," said a SAT official, who is tracking the cases.

In orders passed in 2002, 2003 and 2004, the capital market regulator barred the broking entities, including Ketan Parekh entities and his associate companies, from dealing in securities market.

The Ketan Parekh-led scam had left thousands of investors in the lurch, while it led to the collapse of the US-64 scheme of the then government-controlled Unit Trust of India.

A top executive of a broking house, which recently received a favourable order from SAT, said the firm was facing an uphill task to catch up with time and clients lost following the Sebi order.

"We have been fighting our cases for the past four years. Though we may not have been stopped from trading (after the stay orders from SAT), we have lost our reputation and clients," said an executive of a brokerage house.